The Hershey Company

The Hershey Company, commonly known as Hershey's, is an American multinational company and one of the largest chocolate manufacturers in the world. It also manufactures baked products, such as cookies, cakes, milk shakes, drinks and many more that are produced globally.[6] Its headquarters are in Hershey, Pennsylvania, which is also home to Hersheypark and Hershey's Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. The Hershey Trust Company owns a minority stake, but retains a majority of the voting power within the company.[7]

This article is about the chocolate manufacturer. For the ice cream company also known as Hershey's, see Hershey Creamery Company. For other uses, see Hershey's.

The Hershey Company
Hershey
Formerly
  • Hershey Chocolate Co. (1894–1927)
  • Hershey Chocolate Corporation (1927–68)
  • Hershey Foods Corporation (1968–2005)
Public
Traded as
ISINUS4278661081
IndustryFood processing
PredecessorLancaster Caramel Company
FoundedFebruary 9, 1894 (1894-02-09) (as Hershey Chocolate Company) in Lancaster, Pennsylvania, United States[1]
FounderMilton S. Hershey
Headquarters
Hershey, Pennsylvania
,
United States
Number of locations
17 plants[2] (2020)
Area served
Worldwide
Key people
  • Michele Buck (Chairman, President and CEO)[3]
  • Steven Voskuil (Senior VP, Chief Financial & Accounting Officer)[4]
ProductsList of products manufactured by The Hershey Company
Brands
Revenue US$8.0 billion[5] (2019)
US$1.275 billion[5] (2019)
US$1.5 billion[5] (2019)
Total assets US$8.140 billion[5] (2019)
Total equity US$1.72 billion[5] (2019)
OwnerHershey Trust Company
Number of employees
16,140 (Full-time) (2019)
Websitethehersheycompany.com

Hershey's chocolate is available across the United States, and in over 60 countries worldwide.[8][9][10] They have three large distribution centers, with modern technology and labor management systems.[11] In addition, Hershey is a member of the World Cocoa Foundation. It is also associated with the Hersheypark Stadium and the Giant Center.

History
The Hershey's Chocolate World store in Times Square, New York City (2008)
Hershey's Syrup, circa 1950s
Hershey Store located in the Falls Avenue Entertainment Complex in Niagara Falls, Canada

Early Years

After an apprenticeship to a confectioner in 1873, Milton S. Hershey founded a candy shop in Philadelphia. This candy shop was only open for six years, after which Hershey apprenticed with another confectioner in Denver, where he learned to make caramel.[12] After another failed business attempt in New York, Hershey returned to Pennsylvania, where in 1886 he founded the Lancaster Caramel Company. The use of fresh milk in caramels proved successful,[13] and in 1900, after seeing chocolate-making machines for the first time at the 1893 World's Columbian Exposition in Chicago, Hershey sold his caramel company for $1,000,000[13] (equal to $30,732,000 today), and began to concentrate on chocolate manufacturing, stating to people who questioned him, "Caramels are just a fad, but chocolate is a permanent thing."

In 1896, Milton built a milk-processing plant so he could create and refine a recipe for milk chocolate candies. In 1899, he developed the Hershey process, which is less sensitive to milk quality than traditional methods. In 1900, he began manufacturing Hershey's Milk Chocolate Bars, also called Hershey's Bars or Hershey Bars.

Hershey's Cocoa ad from 1918

Hershey, Pennsylvania

In 1903, Hershey began construction of a chocolate plant in his hometown of Derry Church, Pennsylvania, which later came to be known as Hershey, Pennsylvania.[13] The town was an inexpensive place for the workers and their families to live; however the factory itself was built without windows so that employees would not be distracted. To increase employee morale, Milton provided leisure activities and created what would later become Hersheypark to make sure the citizens enjoyed themselves. The milk chocolate bars manufactured at this plant proved popular, and the company grew rapidly.

Hershey's Kisses

In 1907, he introduced a new candy - bite-sized, flat-bottomed, conical-shaped pieces of chocolate that he named "Hershey's Kiss". At first they were individually wrapped by hand in squares of aluminum foil. The introduction of machine wrapping in 1921 simplified the process while adding the small paper ribbon to the top of the package to indicate that it was a genuine Hershey product.[13] Today, 70 million of the candies are produced daily.[14] Other products introduced included Mr. Goodbar (1925), containing peanuts in milk chocolate, Hershey's Syrup (1926), semisweet chocolate chips (1928), and the Krackel bar containing crisped rice (1938).

Unionization

Labor unrest came to Hershey in the late 1930s as a Congress of Industrial Organizations-backed union attempted to organize the factory workers. A failed sit-down strike in 1937 ended in violence, as loyalist workers and local dairy farmers beat many of the strikers as they attempted to leave the plant. By 1940, an affiliate of the American Federation of Labor had successfully organized Hershey's workers under the leadership of John Shearer, who became the first president of Local Chapter Number 464 of the Bakery, Confectionery, Tobacco Workers and Grain Millers' International Union. Local 464 still represents the Hershey workforce.

M&M's

Shortly before World War II, Bruce Murrie, son of long-time Hershey's president William F.R. Murrie, struck a deal with Forrest Mars to create a hard sugar-coated chocolate that would be called M&M's (for Mars and Murrie). Murrie had 20% interest in the confection, which used Hershey chocolate during the rationing era during World War II. In 1948, Mars bought out Murrie's interest and became one of Hershey's main competitors.[15]

21st century

In June 2006, Philadelphia city councilman Juan Ramos called for Hershey's to stop marketing "Ice Breakers Pacs", a kind of mint, due to the resemblance of its packaging to a kind that was used for illegal street drugs.[16]

In September 2006, ABC News reported that several Hershey chocolate products were reformulated to replace cocoa butter with vegetable oil as an emulsifier. According to the company, this change was made to reduce the costs of producing the products instead of raising their prices or decreasing the sizes. Some consumers complained that the taste was different, but the company stated that in the company-sponsored blind taste tests, about half of consumers preferred the new versions. As the new versions no longer met the Food and Drug Administration's official definition of "milk chocolate", the changed items were relabeled from stating they were "milk chocolate" and "made with chocolate" to "chocolate candy" and "chocolatey."[17]

In April 2015, the Hershey chocolate plant on East Chocolate Avenue in Hershey Pennsylvania was demolished to make way for mixed-use development.[18]

A 2016 attempt to sell Hershey to Mondelez International was scuttled because of objections by the Hershey Trust.[19]

In October 2019, Hershey's partnered with Yuengling to produce a limited release collaboration beer titled Yuengling Hershey's Chocolate Porter, becoming Hershey's first licensed beer partnership.[20]

Reese's Peanut Butter Cups

Harry Burnett Reese invented Reese's Peanut Butter Cups after founding the H.B. Reese Candy Company in 1923.[21] Reese died on May 16, 1956 in West Palm Beach, Florida leaving the company to his six sons.[22] On July 2, 1963 the H.B. Reese Candy Company merged with the Hershey Chocolate Corporation in a tax free stock-for-stock merger. In 2020 after 57-years of stock splits,[23] the original 666,316 shares of Hershey common stock received by the Reese family represented 16 million Hershey shares valued at $2.5 billion that pay annual cash dividends of $51.4 million.[24][25] In 1969, only 6-years after the Reese/Hershey merger, Reese's Peanut Butter Cups became The Hershey Company's top seller.[26] As of September 20, 2012, Reese's is the best-selling candy brand in the United States with sales of $2.603 billion, and is the fourth-best-selling candy brand globally with sales of $2.679 billion—only $76 million (2.8%) of its sales are from outside the United States market.[27]

Cadbury's

In 1988, Hershey's acquired the rights to manufacture and distribute many Cadbury-branded products in the United States (except gum and mints, which are part of Mondelēz International). In 2015, they sued a British importer to halt imports of British Cadbury chocolate, angering consumers.[28][29] A merger between Mondelēz and Hershey's was considered but abandoned in 2016 after Hershey's turned down a $23 billion cash-and-stock bid.[30]

Krave Jerky

In 2005, Krave Jerky was founded by Jon Sebastiani after he trained for a marathon and looked for a healthy source of energy.[31] Alliance Consumer Growth, a private equity group, invested in Krave Jerky in 2012.[32] Hershey's purchased the company in 2015 for $240 million.[33] In 2020, Hershey sold Krave Jerky to Sonoma Brands, the food industry incubator founded by Jon Sebastiani in 2016.[34]

Milton Hershey School (MHS)
Main article: Milton Hershey School

Unable to have children of his own, Milton S. Hershey founded the Hershey Industrial School in 1909 for white orphaned boys.[35] In 1918, three years after the death of his wife, Milton Hershey donated around $90 million to the boarding school in trust, as well as 40% of the Hershey Company's common stock.[36] The school's initial purpose was to train young men in trades, but eventually shifted to focus on preparation for college.[36] The Hershey Trust Company has exercised voting rights for the school, and has been a trustee since its founding.[37]

Many of its designs resemble Hershey chocolate products, such as the Hershey Kisses street lights.[38] Milton Hershey was involved in the school's operations until his death in 1945. The Hershey Industrial School was renamed the Milton Hershey School in 1951.[39]

Manufacturing plants

The first plant outside Hershey opened on June 15, 1963, in Smiths Falls, Ontario, Canada, and the third opened on May 22, 1965, in Oakdale, California.[40] In February and April 2007, Hershey's announced that the Smiths Falls[41][42] and Oakdale[43][44] plants would close in 2008, being replaced in part by a new facility in Monterrey, Mexico. The Oakdale factory closed on February 1, 2008.[45] Hershey chocolate factory in São Roque, Brazil, was opened in August 2002. Hershey's Asia operations are largely supplied by their plant in Mandideep, India.[46]

Hershey also has plants in Stuarts Draft, Virginia; Lancaster, Pennsylvania; Hazleton, Pennsylvania; Memphis, Tennessee; Robinson, Illinois, and Guadalajara, Mexico.

Visitors to Hershey can experience Hershey's Chocolate World visitors center and its simulated tour ride. Public tours were once operated in the Pennsylvania and California factories, which ended in Pennsylvania in 1973 as soon as Hershey's Chocolate World opened,[47] and later in California following the September 11, 2001, attacks, due to security concerns.[44]

On September 18, 2012, Hershey opened a new and expanded West Hershey plant. The plant was completed at a budget of $300 million.[48]

On March 9, 2018, Hershey broke ground to expand its Kit Kat manufacturing facility in Hazle Township, Pennsylvania. The expansion project has a $60 million budget and is expected to create an additional 111 jobs at the facility.[49]

Other sales and acquisitions

In 1969, Hershey received a license from Rowntree's to manufacture and market Kit Kat and Rolo in the United States. After Hershey's competitor Nestlé acquired Rowntree's in 1988, it was still required to honor the licensing agreement, and thus Hershey continues to make and market the brands in the U.S. The license would be revoked and revert to Nestlé if Hershey were sold.[19]

In 1977, Hershey acquired Y&S Candies, founded in 1845, and became the makers of Twizzlers licorice candies.

In 1986, Hershey's began a brief foray into cough drops when it acquired the Luden's cough drops brand. By 2001, though, the brand had been sold to Pharmacia (now part of Pfizer),[50] and Luden's eventually became a product of Prestige Brands.[51] Hershey's kept Luden's 5th Avenue bar. In 1988, Hershey's acquired the rights to manufacture and distribute many Cadbury-branded products in the United States (except gum and mints, which are part of Mondelēz International). In 1996, Hershey purchased the American operations of the Leaf Candy Company from Huhtamäki.

In 1999, the Hershey Pasta Group was divested to several equity partners to form the New World Pasta company (now part of Ebro Foods).

On July 25, 2002, it became public knowledge that the Hershey Trust Company was seeking to sell its controlling interest in the Hershey Foods Corporation. The value of Hershey stock skyrocketed 25% with over 19 million shares trading that day. Over the following 55 days, widespread press coverage, as well as pressure from Pennsylvania Attorney General Mike Fisher, the community of Hershey, and Dauphin County Orphans' Court Senior Judge Warren G. Morgan, led to the sale being abandoned. The seven Hershey trustees who voted to sell Hershey Foods on September 17, 2002, for US$12.5 billion to the William Wrigley Jr. Company (now part of Mars Incorporated) were removed by Attorney General Fisher and Judge Morgan.[52] Ten of the 17 trustees were forced to resign and four new members who lived locally were appointed. The former Pennsylvania Attorney General, LeRoy S. Zimmerman, became the new chairman of the reconstituted Milton Hershey School Trustees. Mr. Zimmerman has publicly committed to having the Milton Hershey School Trust always retain its interest in The Hershey Company.

In December 2004, Hershey acquired the Mauna Loa Macadamia Nut Corp. from The Shansby Group.[53]

In July 2005, Hershey acquired the Berkeley, California-based boutique chocolate-maker Scharffen Berger.[54] In November 2005, Hershey acquired Joseph Schmidt Confections, the San Francisco-based chocolatier, and in November 2006, Hershey acquired Dagoba Organic Chocolate, a boutique chocolate maker based in Ashland, Oregon.

In December 2011, Hershey reached an agreement to acquire Brookside Foods Ltd., a privately held confectionery company based in Abbotsford, British Columbia.[55]

In 2015, Hershey announced that they had acquired Krave Jerky, marking the company's first foray outside of the confectionery market in more than a decade.[56]

In 2016, Hershey acquired barkTHINS, a New York-based chocolate snack foods company which expected to generate between $65 million and $75 million in revenue for that year, for $290 million.[57][33]

In 2017, Hershey acquired Amplify Snack Brands, Austin, Texas based maker of SkinnyPop, in an all-cash transaction valued at approximately $1.6 billion.[58]

In September 2018, Hershey announced to buy Pirate Brands from B&G Foods for $420 million in an all-cash deal.[59][60][61]

In August 2019, Hershey announced it would purchase protein bar maker One Brands LLC for $397 million.[62]

Product recalls
  • In July 1998, a number of 100 g (3.5 oz) milk chocolate bars being sold for fundraising events were recalled because they may have contained traces of almonds not listed in the ingredients.[63]
  • In November 2006, the Smiths Falls production plant in Ontario temporarily shut down and several products were voluntarily recalled after concerns over Salmonella contamination possibly found in soy lecithin within their production line. It was believed that most of the products involved in the recall never made it to the retail level.[64][65]

Philanthropy

Hershey has made large contributions to education. One of their most notable contributions was the Elizabethtown College Honors Program.[66] The program was established in 1999 and is funded partially through the endowment.

In 2015, Hershey announced a commitment with Clinton Global Initiative to help build a sustainable supply chain to support basic nutrition for children in Ghana.[67]

Hershey's long-term focus on children and families has yielded long-standing partnerships with organizations such as Children's Miracle Network, Ronald McDonald House, and United Way (UW). In 2016, the company donated more than $486,200 to those organizations.[68]

Criticism

Cocoa purchase

Hershey has been criticized for not having programs to ensure sustainable and ethical cocoa purchase, lagging behind its competitors in fair trade measures.[69]

The "Raise the Bar, Hershey!" campaign was launched in September 2010 by Global Exchange, Green America, the Oasis Trust, and the International Labor Rights Forum. The purpose of the Raise the Bar Campaign was to pressure Hershey to commit "to take immediate action to eliminate forced and child labor [...] from Hershey's cocoa supply"; "to sourcing 100% Fair Trade Certified cocoa beans by 2012 for at least one of its top five selling chocolate bars [...] making at least one additional top five selling bar 100% Fair Trade Certified every two years thereafter"; and that "the majority of Hershey's cocoa across all products will be Fair Trade Certified by 2022". Pressure was particularly directed at Whole Foods Market, which announced on October 3, 2012, that it would cease carrying Hershey's Scharffen Berger line.[70] The Campaign stated, "Whole Foods' decision follows more than 40 natural food retailers and coops publicly expressing concern about carrying Scharffen Berger and Dagoba products as a consequence of the giant chocolate maker's refusal to address child labor in its supply chain".[70] The same day, Hershey's announced it would "source 100 percent certified cocoa for its global chocolate product lines by 2020 and accelerate its programs to help eliminate child labor in the cocoa regions of West Africa".[71]

In 2019, Hershey announced that they could not guarantee that their chocolate products were free from child slave labor, as they could trace only about 50% of their purchasing back to the farm level. The Washington Post noted that the commitment taken in 2001 to eradicate such practices within 4 years had not been kept, neither at the due deadline of 2005, nor within the revised deadlines of 2008 and 2010, and that the result was not likely to be achieved for 2020 either.[72]

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See also

References
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  59. Gasparro, Annie (September 12, 2018). "Hershey to Buy Pirate's Booty Maker for $420 Million". Wall Street Journal. ISSN 0099-9660. Retrieved September 13, 2018.
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  66. "Elizabethtown College -Honors Program".
  67. "Hershey Announces Clinton Global Initiative Commitment to Build a Sustainable Supply Chain to Support Basic Nutrition for Children in Ghana". The Hershey Company.
  68. Resorts, Hershey Entertainment &. "Hershey Entertainment & Resorts Outlines Philanthropic Giving, Community Impact". www.prnewswire.com. Retrieved June 22, 2018.CS1 maint: extra punctuation (link)
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Additional sources
  • Brenner, Joël Glenn (2000). The Emperors of Chocolate: Inside the Secret World of Hershey & Mars. Broadway Books. ISBN 0-7679-0457-5.

https://www.hersheys.com/en_us/our-story/our-history.html

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